The sands in China are shifting

This week I conducted a leadership workshop in China’s largest and most prosperous city, Shanghai. It has been five years since I last visited the city, and there have been two dramatic change in that period.

Dizzyingly tall towers continue to shoot up at a rapid pace. Globally, Chinese contractors are now the masters of modular construction of these structures, and cosmetically at least, the results are impressive. But the quality of the electrical, plumbing and mechanical is far below the sophistication of the outer casing.

I am told that there is a direct correlation between the desirability of an apartment buildings and the speed with which the landlord replaces broken fitments. Websites have arisen where tenants record such data and perceptions, and these are now used by landlords to aid in their pricing strategies.

Construction growth is a continuing trend, but my other observation indicating shifting sands under the controlled economy.

The people of China are opening their wallets and opening up their mouths.

China has a growing middle-class, and they are both spending and talking. While there has been a concentration of wealth in the major cities for some time, there is now an increasing display of disposable income in the neighbouring districts.

On this trip I stayed in Jinshan, a seaside town a couple of hours south of Shanghai. Five years ago, most inhabitants promenaded along the front in work uniforms, or drab clothes drawn from a limited colour palette.

This Sunday past, the 18-25 years wore styles and brands that would have matched those of their modestly wealthy counterparts in Berlin, Manchester or Boston. The penetration rate of sunglass usage exceeded 20%, and sunglasses usage rate is, for me, a leading indicator of commercial confidence in the economy.

Additionally, for the first time in the smaller cities, I heard criticism about the Government. But these were not grumbles about civil liberties and increasing surveillance. These gripes were about the economy, and they would seem familiar to those who live in the West:

Factories are moving to other countries such as India and Vietnam where the labour rates are cheaper.

Businesses who borrowed heavily on the expectation of continued high growth rates are squeezed from three directions. Cheap loans are less available, growth rates have declined so less cash is coming in, and employees are demanding higher wages.

Pollution of air, food and water are cited reasons why potential parents decide against a family.

Government officials are levied lower tax rates, preferential housing opportunities, and receive higher pensions than their equivalents in the private sector.

But this is progress. Airing these issues will lead to their resolution, and an indication that China is really starting to open up. A further measure of the increasing openness of Chinese society is the build up of return immigration by overseas Chinese, professionals and students. In 2012 272,900 overseas students came back, an increase of 46.57 per cent compared with 2011.

It seems that most people want the same thing for their families, regardless of ‘culture.’

They want:

safety and security

education for their children

jobs

time for themselves, family and friends

Government is still incredibly powerful in China, and the man-made beach close to the uniform, concrete apartment buildings represented their muscle.

But, as the sun set on their day by the sea, parents would pack up the bucket-and-spade of their single child family unit, and fill a plastic back with sand so the holiday could continue at home.